The Petroleum and Submarine Pipe-lines Act 1975 (1975 chapter 74) was an Act of the

Parliament of the United Kingdom The Parliament of the United Kingdom is the supreme legislative body of the United Kingdom, the Crown Dependencies and the British Overseas Territories. It meets at the Palace of Westminster, London. It alone possesses legislative suprema ...

which addressed the licensing, ownership, exploitation, production, transportation, processing and refining of

petroleum Petroleum, also known as crude oil, or simply oil, is a naturally occurring yellowish-black liquid mixture of mainly hydrocarbons, and is found in geological formations. The name ''petroleum'' covers both naturally occurring unprocessed crud ...

and petroleum products in the UK. Enacted in 1975 when the UK’s first

North Sea oil North Sea oil is a mixture of hydrocarbons, comprising liquid petroleum and natural gas, produced from petroleum reservoirs beneath the North Sea. In the petroleum industry, the term "North Sea" often includes areas such as the Norwegian Sea ...

was produced, the Act aimed to provide greater public control of the oil industry. The Act established the

British National Oil Corporation Britoil plc was originally a privatised British oil company operating in the North Sea. It was once a constituent of the FTSE 100 Index. The company was acquired by BP in 1988, becoming a brand of it. One of Labour’s election manifesto pledges was to: "Take majority participation in all future oil licences and negotiate to achieve majority State participation in existing licences. Set up a British National Oil Corporation … Take new powers to control the pace of depletion, pipelines, exploration and development". The BNOC was to have several functions: holding production licences with private sector partners; commercial trading in downstream activities; exploration to establish the extent of reserves; providing expert services to the government; and acting as an agent of the government. The BNOC would provide resources to allow participation of the private sector in development of offshore oil. It would establish the conditions under which licences were awarded. It was also thought desirable that the government should have the power to make loans and to guarantee loans to oil companies developing discoveries in the North Sea. Furthermore, there was perceived to be little control over the development of oil pipelines to avoid unnecessary proliferation, to minimise damage, and to reduce the risk of pollution. Neither was there control over the safety of pipelines and protection of people laying them under hazardous conditions. Finally, the national policy on oil was generally not taken into account in decisions on

oil refinery An oil refinery or petroleum refinery is an industrial process plant where petroleum (crude oil) is transformed and refined into useful products such as gasoline (petrol), diesel fuel, asphalt base, fuel oils, heating oil, kerosene, lique ...

construction. To better exploit North Sea oil there was a need to have appropriate types of refining capacity. The Petroleum and Submarine Pipe-lines Act 1975 aimed to address these issues and implement the proposals.

Petroleum and Submarine Pipe-lines Act 1975

The Petroleum and Submarine Pipe-lines Act 1975 (1975 c. 74) received

Royal Assent Royal assent is the method by which a monarch formally approves an act of the legislature, either directly or through an official acting on the monarch's behalf. In some jurisdictions, royal assent is equivalent to promulgation, while in oth ...

on 12 November 1975. Its long title is: ‘An Act to establish the British National Oil Corporation and make provision with respect to the functions of the Corporation; to make further provision about licences to search for and get petroleum and about submarine pipe-lines and refineries; to authorise loans and guarantees in connection with the development of the petroleum resources of the United Kingdom and payments in respect of certain guarantees and loans by the Bank of England; and for purposes connected with the matters aforesaid.’

Provisions

The Act comprises 49 Sections in 5 Parts and 4 Schedules: * PART I The British National Oil Corporation ** Constitution – Section 1 – Constitution of the Corporation ** General functions of the Corporation – Sections 2 to 4 – General powers, duties and directions by the Secretary of State ** Financial provisions – Sections 5 to 10 – General financial duties, borrowing powers etc., loans by the Secretary of State, guarantees, exemption from petroleum revenue tax and stamp duty, accounts and audit, duty of the Corporation ** Miscellaneous – Sections 11 to 16 – provision of information, co-ordination of the Corporation and the

British Gas Corporation British Gas (trading as Scottish Gas in Scotland) is an energy and home services provider in the United Kingdom. It is the trading name of British Gas Services Limited and British Gas New Heating Limited, both subsidiaries of Centrica. Serving ...

, shares of NCB (Exploration) Ltd., annual report * PART II Petroleum production licences ** Sections 17 to 19 – modification of model clauses, retrospective application to existing licences * PART III Submarine pipe-lines ** Construction and use of pipe-lines – Sections 20 to 25 – control of construction and use, authorisations for pipe-lines, increases in capacity, rights to use pipe-lines, termination of authorisations, vesting ** Safety and inspection – Sections 26 & 27 – safety and Inspectors ** Criminal and civil liability – Sections 28 to 30 – enforcement, criminal proceedings, civil liability ** Supplemental – Section 31 to 33 – exclusion, regulations, interpretation * PART IV Refineries ** Sections 34 to 39 – control of construction and extension, authorisations, planning permission, inspectors, offences, Scotland and Northern Ireland * PART V Miscellaneous and General ** Miscellaneous – Sections 40 to 44 – National Oil Account, payments to petroleum licence holders, loans to promote development, Burmah Oil Co. Ltd., extension of Mineral Workings (Offshore Installations) Act 1971 ** General – Sections 45 to 49 – amendments of enactments, orders and regulations, expenses, interpretation, commencement and extent * Schedules ** Schedule 1 – Additional provisions of British National Oil Corporation ** Schedule 2 – Production licences for seaward areas ** Schedule 3 – Production licences for landward areas ** Schedule 4 – Authorisations for Section 20

Consequences of the Act

The British National Oil Corporation was formally established on 13 November 1975. Lord Kearton was the Chairman and Chief Executive, and

Alastair Morton Sir Robert Alastair Newton Morton (11 January 1938 – 1 September 2004) was Chief Executive of Eurotunnel and Chairman of the Strategic Rail Authority, industrialist and the last chairman of the British Railways Board. Early life Morton was b ...

was one of the four managing directors. BNOC took over the oil and gas assets of NCB (Exploration) Ltd. a subsidiary of the

National Coal Board The National Coal Board (NCB) was the statutory corporation created to run the nationalised coal mining industry in the United Kingdom. Set up under the Coal Industry Nationalisation Act 1946, it took over the United Kingdom's collieries on "ve ...

. From February 1976 BNOC’s capital expenditure budget for the following 15 months was £450 million. The BNOC could negotiate the right to buy back up to 51 per cent of an oil field’s production. In practice this was sold back to companies to refine. In 1976 BNOC obtained the majority of

Burmah Oil Company The Burmah Oil Company was a leading British oil company which was once a constituent of the FTSE 100 Index. In 1966, Castrol was acquired by Burmah, which was renamed "Burmah-Castrol". BP Amoco (now BP) purchased the company in 2000. History ...

’s UK interests in the Ninian and Thistle fields. BNOC thereby became an operating oil company. The Labour government had intended to buy its way into oil finds as a full licensee with a 51 per cent interest. However, the government decided to participate through negotiated agreements where it had the right to take at market price up to 51 per cent of crude oil and

natural gas liquids Natural-gas condensate, also called natural gas liquids, is a low-density mixture of hydrocarbon liquids that are present as gaseous components in the raw natural gas produced from many natural gas fields. Some gas species within the raw natur ...

, and any natural gas not purchased by the

. The Secretary of State for Energy made the Submarine Pipe-lines (Inspectors etc.) Regulations 1977 Statutory Instrument 1977 No. 835 and appointed inspectors into the Petroleum Engineering Division of the Department of Energy.

Later enactments

Under the terms of the

Oil and Gas (Enterprise) Act 1982 The Oil and Gas (Enterprise) Act 1982 (1982 chapter 23) is an Act of the Parliament of the United Kingdom which started the process of privatisation of the oil and gas industries in the UK. It empowered the government to float off and sell share ...

the British National Oil Corporation was split into an oil production organisation – Britoil – which was floated on the stock exchange in 1982 and 1985, and a residuary trading arm. The

Oil and Pipelines Act 1985 The Oil and Pipelines Act 1985 (c. 62) is an Act of the Parliament of the United Kingdom which established the Oil and Pipelines Agency to buy, sell or deal in petroleum and to manage on behalf of the Crown petroleum pipelines and storage instal ...

repealed Part 1 (Sections 1-16) of the 1975 Act and formally abolished the British National Oil Corporation and transferred its property, rights and liabilities to the

Oil and Pipelines Agency The Oil and Pipelines Agency (OPA) is a statutory corporation of the Ministry of Defence (MoD) in the United Kingdom. Its current role is to operate six coastal Oil Fuel Depots on behalf of the MoD. The OPA was also previously responsible for th ...

. The

Petroleum Act 1987 The Petroleum Act 1987 (1987 chapter 12) is an Act of the Parliament of the United Kingdom which updates the arrangements for regulating offshore installations and their operation. In particular it makes provisions for the licensing and the saf ...

, made provision for the abandonment of offshore installations and submarine pipe-lines; it amended the Petroleum (Production) Act 1934; and amended the Petroleum and Submarine Pipe-lines Act 1975. The 1987 Act repealed Sections 34 to 39 of the 1975 Act relating to oil refineries. The Petroleum and Submarine Pipe-lines Act 1975 was repealed on 15 February 1999 under the provisions of the

Petroleum Act 1998 The Petroleum Act 1998 is an Act of the Parliament of the United Kingdom which consolidated arrangements for the licensing, operation and abandonment of offshore installations and pipelines. As a consolidation Act, it did not change the substant ...

References

{{reflist United Kingdom Acts of Parliament 1975 History of the petroleum industry in the United Kingdom 1975 in economics

Petroleum and Submarine Pipe-lines Act 1975

Provisions

Consequences of the Act

Later enactments

See also

References